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8/31/2012 8:30:00 AM Write a Letter to the Editor Write a letter to the Editor

EPA Sets Rule Allowing Navistar to Sell 2010 Engines

Per-Engine Penalty Doubles to Almost $3,800

Navistar Inc. will once again be able to pay a penalty to sell heavy-duty diesel engines that violate 2010 emissions standards, thanks to a new federal regulation that replaces a previous set of penalties overturned by a court in June.

The Environmental Protection Agency rule, released late Thursday, sets penalties at up to $3,775 per engine, almost double the amount set by an “interim” rule EPA put forth in January. A federal court threw that rule out in June, saying the agency could not set the penalties without gathering public comment first.

Navistar President Troy Clarke said the company was “pleased” with EPA’s rule.

“We can now provide our dealers and customers with clarity and certainty as we transition to our clean engine technology and look forward to utilizing the final rule as needed,” the company said in a statement.

Navistar shook up its top management earlier this week, promoting Clarke to the position of president, as longtime CEO Daniel Ustian retired.

Navistar executives last week set a strategy for revamping their product line using selective catalytic reduction, or SCR, technology and offering engines made by Cummins Inc.

EPA expects the rule to have a “minimal environmental impact,” because relatively few engines will use the penalties, the agency said.

Though the rule is not limited to Navistar, the Lisle, Ill., truck and engine maker is the only engine maker that has not yet made an engine that meets 2010 standards. EPA has said in court filings that the rule was intended for Navistar, because the company would quickly run out of emissions credits without the penalties.

Navistar plans to sell engines starting next year that use SCR to meet 2010 standards. Previously, the company had attempted to meet the standards using only exhaust gas recirculation, but never had an engine certified by EPA with only that technology.

The agency said in a statement that the Clean Air Act authorizes the agency to establish nonconformance penalties for heavy-duty engines to provide flexibility that fosters long-term improvement in air quality without forcing manufacturers out of the market. This flexibility allows manufacturers to continue producing and selling engines that come close to air pollution standards as they work toward full compliance.”

The new penalties will be available for Navistar to use as soon as the rule is published in the Federal Register, but its publication date had not been scheduled as of Friday morning. The Office of Management and Budget approved the rule earlier this week.

By Transport Topics
Staff Reporter Timothy Cama contributed to this story.

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